As Bitcoin ( BTC ) continues to struggle below $27,000, the flagship decentralized finance (DeFi) asset has been diverging from the stock market for some time, suggesting that the traditional correlation between cryptocurrencies and stocks may be coming to an end, which may have already been the case Impact on first-time crypto assets themselves.

Specifically, financial reporter David Lin noted that Bitcoin has diverged from the Nasdaq for two weeks as tech stocks "trend higher while Bitcoin trends lower," while "the two have historically moved in tandem." A tweet he shared on June 8.

What does it mean

As Lin points out, such a chart pattern could indicate three things — Bitcoin’s undervalued status, overvalued tech stocks, and the continuation of divergence. Typically, the historical correlation between stocks and Bitcoin means Bitcoin has more room to catch up. However, a weakening of this trend may dash this expectation.​

On the other hand, Bitcoin being undervalued compared to stocks that are rising does not necessarily mean downside. In fact, low prices may attract more investors to buy crypto assets in order to accumulate before prices rise, which in turn may be the result of increased demand.

Ethereum also has differences

At the same time, Bitcoin is not the only major digital asset to show weakness unlike the stock market. Notably, Ethereum ( ETH ) failed to stay above the $2,000 threshold despite the Nasdaq 100 setting a new 52-week high in Q2 2023.

According to Bloomberg’s senior commodities expert Mike McGlone, this scenario “could signal a ceiling of resistance for cryptocurrencies,” and Ethereum “may depend on the stock index to lift all boats,” as he explained in a tweet and chart on June 8.

Bitcoin Price Analysis

Meanwhile, Bitcoin is trading around $26,500 at press time and is currently changing hands at $26,588 as it is up 0.65% on the day but still paring losses of 1.90% from the previous week and 3.59% on its monthly chart.

Meanwhile, Ethereum was trading at $1,841.56 at the time of publication, up a modest 0.05% over the past 24 hours and 0.05% over the past 30 days, while on the weekly chart it was down 2.35%, as per June 9 Retrieved data.